Greater Central Texas Federal Credit Union,
3305 E Elms Road
Killeen, TX 76542
Telephone: 254-690-2274
www.gctfcu.net

Pros And Cons Of Home Loan Modification

25. January 2017 Administrator Home Loans (0)
Home loan modification can be a good option for borrowers who find it difficult to pay their monthly mortgage installments. It is also sometimes helpful in avoiding a foreclosure and saving the lender from having to deal with the process. Lenders also suggest applying for a loan modification, particularly if the borrower is experiencing a temporary financial crunch. It provides the assurance that he will resume making timely payments over time.

What Exactly Is Home Loan Modification?

Home loan modification refers to the process of altering the terms and conditions of a mortgage agreement. It is usually requested by the borrower and on being approved by the lender, the loan repayment is then governed by the new contract. The lender may either approve or reject the application for home loan modification, depending upon the current financial condition of the borrower.

If you are planning to apply for a home loan modification, given below are certain pros and cons that you must consider before making the final decision:

Pros

Extended Loan Term

A shorter loan term implies higher monthly installments. This is the reason why most borrowers opt for a longer loan duration. However, when you extend the repayments to several years, you ultimately tend to pay more as interest. Home loan modification provides a convenient alternative to increase the loan term, without changing the rate of interest. The lender may extend your loan term initially, making it convenient for you to make the monthly payments.

Reduced Interest Rate

In a home loan modification, the lender may also reduce the interest rate for a short time period. This may be done to reduce the monthly installments and allow the borrower to recover from the financial crisis. In such situations, the loan conditions are re-evaluated to determine the amount you can easily pay according to the current debt-to-income ratio. The interest rate may then be temporarily reduced and gradually increased according to the market conditions.

Save Money For Other Liabilities

If you have another pending loan, such as an auto loan, student loan or credit card bill, getting your home loan modified may help you to save money to pay for these. With lower mortgage payments and lesser interest rate, you will have significant money to pay down each month towards other financial liabilities.

Cons

Strict Eligibility Requirements

In order to qualify for home loan modification, you need to convince the lender that you are genuinely facing difficulty in making the monthly mortgage payments. He may verify your credit rating, current financial position, other liabilities etc. to ensure that you are eligible for the program. You may need to provide a number of documents stating all your sources of income and monthly expenses, Due to the extensive paperwork involved in the process, getting a home loan modified may take approximately 30 to 180 days.

Negative Impact On Credit Score

People who apply for a home loan modification would obviously have some sort of financial crisis, which may be perceived as a risk by the future lenders. Applicants with a good credit rating and a flawless record of loan repayments are generally preferred by most lenders. Thus, modifying the home loan may greatly affect your future borrowing abilities, specifically if you are planning to get a higher amount.

Can Be A Risky Proposition

Home loan modification can be a real risk, particularly if you have not done your research. If the lending institution has proposed modifying the home loan, it does not necessarily mean that they will not initiate the foreclosure process. Though it may be true in some cases, you may have to leave your home while the loan modification application is still being reviewed by the lender.

Considering the above pros and cons, it is important to evaluate all your options before applying for a home loan modification.

Greater Central Texas Federal Credit Union is a leading credit union in Killeen, TX providing comprehensive financial services to the clients. We offer flexible home and auto loans at low interest rates and with easy repayment options. For more information, you can call us at (254) 690 – 2274 or visit our office at 3305 E. Elms Rd., Killeen, TX  76542.

Factors Affecting Home Loan Interest Rates In Killeen

15. July 2016 Administrator Home Loans (0)
Everyone wants to get a home loan with the least interest rate so that it is easier to repay the amount. However, the actual cost of the loan depends on various factors. You need to compare quotes from different credit unions in Killeen, TX to know the best home loan rate that you can get.

Below are some factors that can help in determining the rate of interest that you can get on a home loan:

  • Tenure of the loan: Your loan term is one of the deciding factors when it comes to determining the rate of interest. You will generally have a lower rate of interest if you opt for a shorter loan term. However, the monthly payments are higher in this case and you need to plan your budget accordingly.
  • Location of the property: Credit unions have a specified criteria for determining the rate of interest depending on the location of your property. For instance, if your home is situated in an earthquake or flood prone area, you may need to make higher interest payments. The rates may also differ for properties in rural and urban areas.
  • Credit score: The credit score helps the lender get an idea about your ability to repay the home loan. It is determined after checking the details of your payment history of all the loans and credit card bills. Therefore, it is important to examine all your debts and ensure that you have a decent credit score before applying for a home loan.
  • Type of interest rate: There are two broad classifications of the interest rate that you may get on your home loan - fixed and variable rate of interest. While the rate of interest does not change throughout the loan term in the first case, it fluctuates according to the market scenario in the second instance. You can initially get a lower rate of interest if you opt for variable rate but it may increase afterwards.
  • Down payment: A higher down payment towards the home purchase can fetch you a lower rate of interest. This will lessen the amount of money you need to borrow which, in turn, will reduce the risk for the lender. So, make an effort to give at least 20% of your home’s value as down payment.
For affordable home loans in Killeen, consider Greater Central Texas Federal Credit Union. For details about the loan plans, you can call us at (254) 690 – 2274 or visit 3305 E Elms Rd, Killeen, TX 76542.

Home Loan Process In Killeen, TX

16. June 2016 Administrator Home Loans (0)
Buying a home is a big decision which may get a bit overwhelming if one does not understand the mortgage process. There are some tangible preparations that need to be made while deciding on a home loan. A credit union works towards making the process as easy and smooth as possible for its members.

Here are the steps involved while applying for a home loan in Killeen:

  • Get a pre-approval: A pre-approved loan will let you know the type of home you can afford to buy. It also assures the seller that you are a responsible buyer and genuinely interested in buying the property. The lender will assess your total income, debts and other financial liabilities to evaluate the loan amount you can be pre-approved for. Once the amount is known, you can go about scanning for a suitable home in Killeen that suits your requirements.
  • Keep all documents ready: All the important financial documents like bank statements, employment letter, salary proofs, home insurance, tax returns etc. must be kept ready. These may be reviewed by your loan officer to assess your borrowing ability and submit the application.
  • Understand loan type: One must decide if he needs a fixed rate mortgage (interest rate stays the same during the entire tenure of the loan) or flexible mortgage rate (interest rate fluctuates according to the market trends). This choice may depend on your current and future financial condition.
  • Closing the loan: Once all the paper work is done with the credit union, the next step is to go through the terms and conditions of the loan plan all over again. You may need to submit a copy of the property documents and a few postdated checks to close the deal.
Your search for your dream home in Killeen will be fulfilled if you have invested enough time in understanding the loan process and making viable decisions.

Contact Greater Central Texas Federal Credit Union for hassle free home loans in Killeen, TX. For details, call at (254) 690 – 2274 or visit 3305 E. Elms Rd., Killeen, TX  76542.

Fixed Vs. Floating Interest Rate: Home Loans In Killeen, TX

7. January 2016 Administrator Home Loans (0)
Getting a home loan from a credit union in Killeen, TX is not a very tedious job as there is minimum paperwork involved. However, you need to choose whether you want to opt for a fixed or floating rate of interest. Both the options have their own advantages as well as disadvantages and it is up to you to decide which one is better.

Fixed rate of interest home loans

A fixed rate of interest implies repayment of loan in fixed equal installments during the loan term. In this case, the rate of interest remains constant and does not change with the market fluctuations.

Advantages:

  • No alterations in the rate of interest irrespective of market conditions.
  • Perfect option for people who have fixed budgets.
  • It is a secure alternative.
Disadvantages:

  • Loans are 1 to 2.5% higher than floating interest rate depending on the bank.
  • If the interest rate decreases in the market, you will not get any advantage.
  • In some instances the fixed rate home loan is fixed only for a few years and not the complete loan tenure.
Floating rate of interest home loans

If you apply for a home loan with a floating rate of interest, it simply means that the interest rate will differ as per the market conditions. In this instance, the interest rates are associated with a base rate and a floating element. Therefore, if there is any alteration in the base rate, the interest rate also fluctuates.

Advantages:

  • Cheaper than fixed interest rate home loans.
  • If the floating rate increases than fixed rate, it is temporary and not for entire loan period.
  • Can prove to be beneficial if you want to save money.
Disadvantages:

  • Monthly installments are not constant.
  • You can face difficulty in planning your budget.
  • There has been a hike in floating interest rates in recent times.

It can be concluded that fixed as well as floating interest rate home loans in Killeen have positive as well as negative aspects. Generally, borrowers opt for a floating rate of interest when applying for a home loan from a credit union. However, if you want more security and certainty, it is better to opt for a fixed rate home loan.

If you are looking for affordable home loans in Killeen, TX, consider Greater Central Texas Federal Credit Union. For more information, call at (254) 690 – 2274 or visit 3305 E. Elms Rd., Killeen, TX  76542.

Tips To Get The Best Home Loan Deal In Killeen, TX

7. December 2015 Administrator Home Loans (0)
A credit union is a community organization run by a group of individuals for their own members. Borrowers are increasingly opting for credit unions owing to the ease of getting a home loan from these organizations.

If you are on the lookout for an affordable home loan in Killeen, TX, there are some factors that you need to consider. Do a thorough research about the various credit unions and finalize the one where you can get the best home loan deal.

The following factors should be considered when applying for a home loan:

  • Ask for quotes from various credit unions: Different credit unions will offer you varied rates of interests on home loans. Make sure you ask for a quote to have an idea about your monthly repayment amount. Apart from the rate of interest, you should be able to know the limit up to which you can borrow. Compare quotes from different credit unions and finalize the one that offers the lowest rate of interest.
  • Fixed or adjustable rate loan: You can choose to get a home loan at a fixed rate of interest or an adjustable one. In case you select a fixed rate, the repayment amount remains constant throughout the loan term. On the other hand, the interest charged on adjustable-rate mortgage fluctuates over the time period of your loan. This eventually means your repayments will vary as well.
  • Choosing the loan term: You can get to choose a customized loan term from a credit union. Therefore, you can decide the amount of time it will take you to return the home loan. Depending on your income and expenditure, you can settle for a particular number of years within which you will be able to repay your loan. Though a longer duration can lower your monthly payments, it would eventually lead you to pay more interest.
  • Fees and charges: Check if you need to pay any fees or additional charges before getting a home loan approval. These may include ATM fees, loan fees, wire transfer fees etc.
We, at Greater Central Texas Federal Credit Union, offer hassle-free home loans in Killeen, TX. For more information, you can call us at (254) 690 – 2274 or visit our office at 3305 E. Elms Rd., Killeen, TX  76542.

Before You Apply For A Home Loan In Killeen, TX ‬

8. September 2015 Administrator Home Loans (0)
Purchasing a home is one of the biggest investments that a person makes in his lifetime. Getting a home loan can reduce the financial burden involved in the process. However, the costs involved in premiums and interest can take up large amount of all total monthly expenses. Therefore, it is important that you are familiar with the basic factors that can help you get an affordable home loan.  

Here are some points to remember before applying for a home loan:

  • Loan Eligibility: The home loan amount depends on your income and previous loan record. There may be a significant difference in the online quoted amount and the actual loan sanctioned. Thus, you should have a clear idea about the loan plan you are eligible for.
  • Budget: You must evaluate your budget before applying for a home loan. This will help to determine the amount you can pay upfront for the home and the remaining can be applied for as loan. The budget also assists in deciding on a monthly amount that you can afford.
  • Credit Score: You should maintain a clean and dependable credit score. Maintenance of bank accounts, credit card usage, existing loans, payment of bills, all these can affect the interest rate charged on your home loan.
  • Interest Rate: The type of interest rate determines the amount you would have to pay every month. You can select between fixed rate and floating rate home loan. You can make the choice depending on your financial condition and current market rates.
  • Loan Duration: This will determine the interest amount and its portion that you will have to pay every month. A longer tenure will reduce the monthly payments but will eventually result in more interest payments.
  • Documents: You must ensure that you read the documents carefully before signing. All verbal contracts and negotiations must be in written. You should check the applicable charges, processing fee, late charges etc.
  • Research: It is essential to get quotes for different home loan policies and choose the one that best suits your needs. You can consider a credit union for low interest home loans.
  • Extra Charges: You must be aware of any extra charges that may be incurred during the course of the loan repayment. It is important to clarify the queries during the initial stage to avoid paying processing fee at a later stage.
We, at Greater Central Texas Federal Credit Union, offer affordable home loans in Killeen, TX. For more information, you can call at (254) 690 – 2274 or visit 3305 E Elms Rd, Killeen, TX 76542.

Things To Consider Before Applying For Home Loan

22. July 2015 Administrator Home Loans (0)
Filling for a home loan is a time consuming process requiring research and paperwork. You need to ensure that the loan suits your requirements and is the best deal in the market. Getting a loan from a credit union offers various benefits but you should consider certain important factors before applying for the loan.

Given here are a few points that you must consider:

  • Know The Jargons: It is essential to have a clear understanding of the terminologies involved in the home loan process to avoid misunderstandings. Some of these are annual percentage rate (APR), refinance, loan to value ratio, fixed rate, floating rate etc.
  • Determine Your Budget: You must set some time aside to determine your financial position taking into consideration the insurance and taxes. If possible, you should consider making a higher down payment against the loan. This will reduce the overall interest rate and subsequently lower your monthly payments.
  • Know Your Eligibility: The loan amount that you are eligible to borrow from a credit union depends on factors such as your annual income, previous loan payment records, credit card dues etc. In case you have any other liabilities, like a personal or auto loan, your eligibility may drop.
  • Tenure Of The Loan: Your monthly payment will be inversely proportionate to the tenure of the home loan. If you choose a longer tenure, the EMI will be less and if the duration is shorter, the installments will be high. However, longer duration loans also increases the total amount of interest paid. Therefore, you should carefully weigh all the alternatives to choose the appropriate loan tenure.
  • Type Of Interest Rate: In a fixed rate loan, the EMI does not change throughout the repayment tenure. On the other hand, in a variable rate loan, the EMI keeps on changing according to prevailing base rates in the market.
Greater Central Texas Federal Credit Union is a leading credit union offering affordable homes loans to the clients in Killeen, TX. We have an easy application process and provide instant approval for most home loan applications. The staff can assist in the application process and solve any queries pertaining to the loan application. For more information, you can call us at (254) 690 – 2274.

Why Choose A Credit Union For Home Loans

5. March 2015 Administrator Home Loans (0)
There are various benefits associated with a credit union membership and one of them is the ease to get home loans. However to understand the process you should be familiar with the working of a credit union.

What is credit union?

Credit unions are financial institutions that offer checking and saving accounts, receive deposits, and offer credit for a wide range of needs such as home loans, auto loans, etc. However, unlike banks, they are member owned non-profit organizations that aim at building up the local community. Due to their lower operating costs credit unions offer low mortgage rates.

Benefits of having home loan from a credit union

Purchasing a home is a daunting task due to the expenses involved. Most people apply for a home loan when buying a house as it makes the process easier. However, it is very difficult and time consuming to get a loan approved banks, due to the formalities and paper work involved. Thus, a credit union is the best alternative to banks for auto loans and home loans. It approves the loan quicker and offers flexibility in repayment as well.

  • Lower rates of interest: Credit unions offer favorable interest rates as compared to banks that help in making savings in the long run. The unions are non-profit organizations and are exempt from paying taxes like traditional lenders. Therefore, credit unions offer lower interest rate on home loan mortgages.
  • Flexibility: Unlike banks, the credit unions are more flexible in the policy and are cooperative with their members. As the credit union is members owned, all the members have the right to vote on important issues that affect the rates of interests. 
  • Lower income requirements: The credit unions may also approve borrowers with lower income. Thus people who might not qualify for a loan in a bank stand a better chance of getting a loan through a union. 
  • Other benefits: Some other benefits of taking home loans from credit union include personalized service in comparison to banks, higher payouts on certificates of deposits, faster closing options and even the possibility to miss a payment.
A credit union surely has an edge over banks and offers many benefits to its members. However, you should consider discussing your case with a consultant to get the full details about your individual case.

We, at Greater Central Texas Federal Credit Union provide you home loans at affordable interest rates. For more information, you can visit us at 3305 E Elms Road, Killeen, TX 76542 or call (254) 690 – 2274.